Sunday, 21 October 2012

Who Needs An Army To Invade And Capture A Country?

The deal will tie the hands of Canadian governments, especially in the resource sector, once Chinese firms buy Canadian assets. It allows Chinese companies to sue Canada outside of Canadian courts. Remarkably, the lawsuits can proceed behind closed doors. This shift to secrecy reverses a long-standing policy of the Canadian government.

Under the deal, Chinese firms can sue in special tribunals to protect themselves from Canadian government decisions. Canadian companies can do the same against China. The technical name for this is “investor-state arbitration.” In Canada, it has been in operation since NAFTA.

In turn, any decision by any state entity in Canada — from federal or provincial legislation to a Supreme Court of Canada decision — can be challenged by a Chinese investor. The arbitrators, if they conclude that the decision violates flexible standards of investor protection, can issue orders and award damages against a country.

On the other hand, no one in Canada including the government will be able, under the deal, to sue a Chinese investor for breaking any laws. The claims are one-way. Also, only the federal government can participate in the arbitrations. Provincial governments, Canadian companies and other constituencies have no right of standing even if their interests are affected directly.

There is reason to doubt the independence of the arbitration process. Unlike judges, the arbitrators do not have secure tenure and set salaries. They depend for business on investors (to bring the claims) and on arbitration houses (to choose the arbitrators when the disputing parties disagree). Further, the arbitrators’ decisions on legal issues are not subject to judicial review.

So, it is prudent to ask, who are the arbitrators more likely to see as the major country, Canada or China?

We've been down this road twice before. The first time it was called the FTA (the Free Trade Agreement with the U.S.). The second time is was called NAFTA (the FTA expanded to included Mexico).

And how has that worked out for us?

Canada has a mixed record in investor-state arbitration. We have lost about half of the decided cases against the government, all by U.S. companies under NAFTA. Canada has had to pay about $160 million in compensation, with another award pending in a case involving research and development rules for the Hibernia and Terra Nova offshore projects.

Worse, Canadian investors have sued other countries, usually the U.S., 16 times and lost every case. We have lost on softwood lumber, cattle and gold mining. We have lost on gasoline additives, hemp and funeral homes. We have lost on a lot of things.

And this is the best part:

Most surprisingly, the Chinese lawsuits can be kept secret. This is in stark contrast to other treaties signed by Canada. Under NAFTA, since 2001, Canada and the U.S. have ensured that investor-state arbitrations were open.

Under the Canada-China deal, the arbitration hearings and all documents, except an actual award, can be kept confidential at the discretion of the country that is sued. This suggests that China objected to disclosure of Canadian lawsuits against it. More importantly for Canadians, the Harper government did not insist on disclosure when Canada is sued by the Chinese.

By implication, we shall have to assume in time that there are hidden Chinese lawsuits against Canada. We will not know why we have been sued or who is deciding the case. We will not know what the government is arguing on our behalf. And we will not know if Canada has been ordered to change government decisions.

I sit in wonder considering the minds of our leaders in Ottawa, elected to represent our best interests, who agree to what is clearly a raw deal for Canada and ask "what the hell were they thinking?"; a question that can be resolved by answering the question "what's in it for them?" because there is no way this can be good for Canada as a nation and us Canadians as people. Bay Street firms will make a killing which is where most of those in elected office hope to end up in their post-public office careers, which is probably why they're going along with this agreement.

When the FTA was passed by the corrupt regime of the Mulroney Conservatives Canada lost nearly half a million manufacturing jobs to the U.S. between 1989 and 1991 which was exacerbated by the accelerated take-over of Canadian companies by American ones. Few, if any, new jobs were created and the prosperity promised by the FTA eluded us.

NAFTA is just the FTA expanded to include Mexico.

With both deals we were told it would grant greater access for Canadian companies to the larger markets in the U.S. and Mexico. What happened was the expanded take-over the the Canadian and Mexican economies by mostly U.S. interests.

Do you think this will be any different? We're told it would grant greater access to the Chinese market but who are we kidding? It will only mean the greater control of the Canadian economy by Chinese interests.

What China has at it's disposal that the U.S. doesn't is a large and growing exported population that has effectively colonized parts of Canada's major cities. Due to it's size all the political parties are sensitive to their demands in return for votes. To think that China will not exploit this population to influence Canadian foreign and social policy is naive. China has already been accused of spying on Canada and influence peddling in B.C. Do you think that's going stop any time soon?

I don't think I'm stepping out of line when I think in Beijing's eyes it sees the emigration of it's people as a form of overseas colonization. After all, China does not recognize dual citizenship and it has been flooding Tibet with ethnic Han Chinese with what one could arguably consider an act of soft cultural and ethnic genocide to pacify the once former sovereign nation. Though a restrictive country I don't see China being very restrictive when it comes to allowing its citizens to move and live abroad.

This is colonialism in the modern age. Gone are the need for gunboats and soldiers. All you need now are pen and paper and an immigration system guided by naivety and baseless assumptions. And the men and women stupid or selfish enough to let it all happen.

For more reading on the Canada-China Investment Treaty the Green Party of Canada has this page about it. I don't support or endorse the Green Party but I provide the link, which was brought to my attention, for information purposes.